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Friday Jan 01 2021

FBR narrowly misses tax collection target for July-Dec 2020

  • FBR officials hopeful of increase in net revenue collection
  • The FBR collects Rs503 billion for December against target of Rs541 billion 
  • FBR’s crossing of Rs2,000 billion mark will help in stalled IMF talks

ISLAMABAD: Federal Board of Revenue has narrowly missed its collection target for the first half of the ongoing fiscal year, The News reported on Friday. 

The board collected Rs2,195 billion during July-December period against desired target of Rs2,210 billion, sources told The News. It collected Rs2,094 billion in the same period last fiscal year. 

Read more: Cabinet approves Javed Ghani's appointment as FBR chairman

Speaking on conditions of anonymity, the FBR officials said net revenue collection crossed Rs2,200 billion and may see an increase. This would help the country in the upcoming International Monetary Fund (IMF) discussions.

The tax body, they added, may be able to achieve the agreed target set by the IMF for the first six months of the current fiscal year. 

Read more: FBR sends 'very polite' tax notice to 70,000 potential tax evaders

The target for December 2020 was set at Rs541 billion but the FBR had been able to collect Rs503 billion. However, an official claimed that the monthly collection had reached Rs517 billion. In the same period last fiscal year, the FBR collected Rs476.7 billion - a Rs26.3 billion increase.

The country’s tax collector has also paid refunds of Rs102 billion during December 2020.

“The FBR has performed well to cross collection figure of Rs500 billion as it will set the stage to go close to the desired target of Rs4,963 billion till June 30, 2021,” sources told The News.

The authority has to collected Rs2,768 billion in the second half of the current fiscal year to achieve fixed target of Rs4,963 billion.

Read more: FBR serves notices to 832,000 non-filers

Economists, however, believe it would be tough for the board to achieve the target and it would leave the government with two options: slash down target or take additional measures to satisfy the IMF.

Revival of the stalled IMF programme is a must for the country.

Another factor influencing the talks with IMF is the relief provided to the construction sector. The package may be a good omen for the country if it helps revive the sluggish economic activities touching its lowest ebb of -0.4% in the last fiscal year of 2019-20 - second time in the country's history since 1952.